So you have decided to buy an investment property. It may be your first or your second property and now you are starting to realise Australia is your oyster! You don't need to buy around the corner anymore, with technology at our fingertips, it is easier than ever to successfully own and manage properties interstate. So you don't just need the knowledge of your backyard, you need the knowledge of Australia as a whole and where the best place to invest will be for the short and long term.
But where to get the information and who's advice should you take? There is so much conflicting information out there these days it makes it hard to know what and who to listen to.
Well let's break it down.
The Media - Surely i don't have to tell you to not listen to everything you hear on TV do i? Good. As you will be aware, media outlets say one thing today and completely contradict it tomorrow. "The market will crash" oh wait! "The market is booming" I have literally seen an instance where a news reporter re-reported a 'Betoota Advocate' story (fake news). The media is often just chasing it's tail in regards to the property market and is reporting anything and everything because any news is news to them. Don't listen to the media, although there are some select property professionals who are very reputable, who get on the ground, do the research and actually know whats going on (like us). Listen to them. 😊
Your Friends - This comes down to the old "BBQ Advice". We all have that one friend who has a few properties and they think they know everything about the property market. Yes your friend may have done well in their investing, but that doesn't mean their strategy will work well for you. They may have simply had a property in a market that jumped due to infrastructure boom that they actually had no idea about - got lucky! Be wary on taking advice from friends unless they are genuine property experts.
Accountants - Perfect for advice at tax time to help with claiming depreciation and property tax incentives. Not licensed to sell real estate but can refer you to someone who is. Although keep in mind they may get a referral fee. Be mindful of who they refer you to and whether they are the right agent. Sometimes licensed to give advice on Self managed Super Funds.
Financial Advisor - Great to get advice on your financial situation and how to use structure your future given your personal position. But, again they are not licensed to sell real estate. Financial advisers understand investments as a whole, although they have experience in the industry, they are normally not real estate experts. So many instances i have seen clients buy properties their financial advisers had recommended simply because the adviser knew the developer and received a referral fee. They are not supposed to do this, but it happens more often than you would think. Advisers are Licensed to give financial advice and sometimes licensed to give advice on Self managed Super Funds. They are great and necessary for planning your future and establishing your investment risk profile, but when it comes to choosing the property, it's better to get an opinion from a 3rd party - an expert in the field of Real Estate.
Broker/Banker - An integral part of the property process is utilising a broker or banker to organise your finance to purchase an investment property. They should be giving advice on the best way to structure your finance given your personal situation. They will often have referral partners in the real estate industry who they may refer you to if you may need help choosing a property. Just be mindful of the referral partners experience/knowledge, is it national or is it localised? Broker/Bankers are not licensed in Real Estate, but can refer you to someone who is and they may get a referral fee. They are licensed to discuss and provide finance solutions.
Real Estate Agent - Finally we have a property expert! Real estate agents, live and breathe property. They understand how the finance works, they keep on top of changing lending criteria, they keep on top of shifts in the market and prices changes in their area. They know how to negotiate for both the vendor and the purchaser.
But wait. There is a downside to an agent. Often their expertise is localised. Meaning, they know everything about the real estate game in their region but not so much in other parts of the country. For example, a real estate agent in Newcastle, may know everything there is to know about Newcastle, but they might not know about the $11 billion worth of infrastructure that's planned for the western region of Melbourne that is already driving prices above 42% in 12 months. It is often like getting advice from an agent with blinkers on (horse terminology) - they can only see what's in front of them.
They are licensed to sell real estate, usually only in one State. Normally area specific to one region. Gets paid a commission from the vendor, builder or developer. Knowledge of the market outside their region is often limited to hearsay.
Property Marketer - is sometimes licensed to sell real estate across different States and will often push to you their own projects or specific projects they have been approached to sell on behalf of developers. They normally have very high overheads to run call centres, public events and multiple showrooms or head offices. Get paid a commission from the builder or developer they refer clients to. Should have a good knowledge of the market place as a whole but we have found they are often blinded by their own projects. Often will push towards whatever deal has the hottest 'hype'.
Property Advisor - Now this term is used loosely with some companies, although there are some very very good property advisers in the Australian market. A property advisor's primary focus should be on education in keeping up with the ever changing markets. They should have no bias, much like a buyer's agent they work for the purchaser (not the vendor) and they should search all over the country for the best options available. A good property advisor's knowledge should not be limited to a location. They should be your feet on the ground experts in every area of interest in Australia. They should be able to provide you genuine 'local knowledge' on each market. We do! 😎
They are licensed to sell real estate across different States and will often start by identifying your specific needs and requirements before selecting a range of properties to meet your property strategy. Get paid either as a buyers agent for the purchaser OR from the vendor, builder or developer - it varies depending on the advisor.
If there is anything else you wish to know about where to get property advice, then please feel free to contact us.
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